Download or read book Aggregate Versus Sectoral Shocks written by Saurabh Sharma and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The comovement among different sectors of the Indian economy is found to be low which suggests an important role for sector-level disturbances vis-à-vis aggregate shocks in explaining economic fluctuations. Accordingly, the paper adopts a multisectoral framework that accounts for aggregate as well as sectoral shocks to offer a new take on the Indian economy. Using a dynamic factor model to decompose GDP, the paper finds that around 48 per cent of the variation in GDP in the long-run is explained by sectoral shocks, with their contribution increasing to 98 per cent in the short-run. Thus, short-run economic fluctuations or the business cycle is almost entirely driven by sectoral shocks. Among sectoral shocks, those associated with public administration followed by manufacturing and agriculture are found to contribute most to the GDP movement in the short run. A historical decomposition analysis shows that sectoral shocks emanating in the manufacturing sector have been consistently unfavourable, highlighting that the sector has been unable to keep pace with the rest of the economy. Further, it is found that most of the sectoral shocks move GDP and inflation in the opposite direction thereby generating an impact similar to a supply shock.
Download or read book The Aggregate Effects of Sectoral Shocks in an Open Economy written by Philippe Andrade and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the aggregate effects of sectoral productivity shocks in a multisectoral New Keynesian open-economy model that allows for asymmetric input-output linkages, both within and between countries, as well as for heterogeneity in sectoral Calvo-type price stickiness. Asymmetries in the international production network play a key role in the model's ability to produce large domestic effects of foreign sectoral supply shocks and large differential effects of domestic shocks and global shocks. Larger trade openness and substitutability between domestic inputs and foreign inputs can also significantly amplify the effects of foreign and global sectoral shocks on domestic aggregates. In comparison, sectoral heterogeneity in price stickiness does not materially amplify the domestic responses to productivity shocks that originate abroad.
Download or read book Three Essays on the Relation Between Sectoral Shocks and Aggregate Demand written by Koen Vermeylen and published by . This book was released on 1997 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Real Sectoral Spillovers A Dynamic Factor Analysis of the Great Recession written by MissNan Li and published by International Monetary Fund. This book was released on 2018-05-09 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies changes in the transmission of common versus sectoral idiosyncratic shocks across different U.S. nonfarm business sectors during the Great Recession, and evaluates the cross-sectoral spillovers. Shocks are identified by dynamic factor methods. We find that the Great Recession is largely a time of heightened impact of common shocks— which accounts for 3/4 of aggregate volatility—and large spillovers of negative financerelated shocks. Moreover, in contrast with the earlier literature that failed to find a significant role of sectoral shocks (propagated through the input-output linkages across sectors) in driving variability in aggregate industry output, this study allows spillovers of shocks to operate through other mechanisms intertemporally. We find that prior to the recession the majority of aggregate fluctuations is explained by sector-specific shocks.
Download or read book Sectoral Shocks and Aggregate Fluctuations written by Michael T. K. Horvath and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a multisector dynamic general equilibrium model of business cycles with a distinctive feature: aggregate fluctuations are driven by independent sectoral shocks. The model hypothesizes that trade among sectors provides a strong synchronization mechanism for these shocks due to the limited, but locally intense, interaction that is characteristic of such input trade flows. Limited interaction, characterized by a sparse intermediate input-use matrix, reduces substitution possibilities among intermediate inputs which strengthens co-movement in sectoral value-added and leads to a postponement of the law of large numbers in the variance of aggregate value-added. The chief virtue of this model is that reliance on implausible aggregate shocks is not necessary to capture the qualitative features of macroeconomic fluctuations. Building on Horvath (1997), which establishes the theoretical foundation for the relevance of limited interaction in the context of a stylized multisector model, this paper specifies a more general multisector model calibrated to the U.S. 2-digit Standard Industrial Code economy. Simulations prove the model is able to match empirical reality as closely as standard one-sector business cycle models without relying on aggregate shocks.
Download or read book Sectoral and Aggregate Shocks to Industrial Output in Germany Japan and Canada written by Reva Krieger and published by . This book was released on 1989 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Aggregate Fluctuations from Independent Sectoral Shocks written by Per Bak and published by . This book was released on 1992 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper illustrates how fluctuations in aggregate economic activity can result from many small, independent shocks to individual sectors. The effects of the small independent shocks fail to cancel in the aggregate due to the presence of two non-standard assumptions: local interaction between productive units (linked by supply relationships), and non-convex technology. We also argue that neither feature on its own would suffice. In the case of a simple model, we explicitly calculate the distribution of aggregate activity in the limit of an infinite number of independently disturbed sectors.
Download or read book Cyclicality and Sectoral Linkages written by Michael T. K. Horvath and published by . This book was released on 1997 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The traditional argument against the relevance of sector-specific shocks for the aggregate phenomenon of business cycles invokes the law of large numbers: positive shocks in some sectors are offset by negative shocks in other sectors. This paper hypothesizes that the law of large numbers may be postponed if the nature of sectoral interactions provides a synchronizing force, heightening co-movement in sectoral production. The analysis is performed within the context of a multi-sector model similar in spirit to that of Long and Plosser (1983). The paper explores the role limited interaction between sectors plays in determining the response of the aggregate economy from sector-specific disturbances. A feature of limited interaction that the paper stresses is that it implies few possibilities of substitution among intermediate inputs and that this increases sectoral co-movement and hence aggregate volatility. A low degree of sectoral interaction is characterized by a sparse input-use matrix. The rate at which the law of large numbers applies for increasing levels of disaggregation is shown to be controlled by the rate of increase in the number of predominantly full rows in the input-use matrix rather than by the rate of increase in the total number of sectors.Investigations of actual input-use matrices from the U.S. economy reveal that the number of full rows increases much slower than the total number of rows upon disaggregation, and when these input-use matrices are used to parameterize the model, aggregate volatility from sectoral shocks declines at a slower rate than that implied by the law of large numbers.
Download or read book Geographical and Sectoral Shocks in the U S Business Cycle written by Atish R. Ghosh and published by . This book was released on 1997 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether the aggregate U.S. business cycle is driven mainly by geographical" shocks (affecting all sectors within a state), or by sectoral shocks (affecting the same sector in all" states). We find that, at the level of an individual sector in an individual state growth are driven by the sector, not by the state: textiles in Texas moves more with textiles" elsewhere in the U.S. than with other sectors in Texas. But shocks to sector growth rates exhibit" a lower correlation across sectors compared to the correlation of shocks to state growth rates" across states. As a result, geographical shocks gain greater importance at higher levels of" aggregation. Finally, we find that changes in the volatility of the aggregate U.S. business cycle" reflect, to a roughly comparable degree, both changes in the volatility of state and sector business" cycles, and changes in their correlation across sectors and states.
Download or read book Uncertainty and Unemployment written by Sangyup Choi and published by International Monetary Fund. This book was released on 2015-02-23 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the role of uncertainty shocks in explaining unemployment dynamics, separating out the role of aggregate and sectoral channels. Using S&P500 data from the first quarter of 1957 to third quarter of 2014, we construct separate indices to measure aggregate and sectoral uncertainty and compare their effects on the unemployment rate in a standard macroeconomic vector autoregressive (VAR) model. We find that aggregate uncertainty leads to an immediate increase in unemployment, with the impact dissipating within a year. In contrast, sectoral uncertainty has a long-lived impact on unemployment, with the peak impact occurring after two years. The results are consistent with a view that the impact of aggregate uncertainty occurs through a “wait-and-see” mechanism while increased sectoral uncertainty raises unemployment by requiring greater reallocation across sectors.
Download or read book Uncertainty and Sectoral Shifts written by Alon Kalay and published by . This book was released on 2016 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study predicts and finds that the interaction of firm-level and aggregate-level shocks explains a significant portion of shocks to macroeconomic activity. Specifically, we hypothesize that the relation between uncertainty and economic growth is most pronounced when both firm-level and aggregate level uncertainty are high simultaneously. Similarly, we hypothesize that aggregate performance affects unemployment most when both firm-level dispersion is high and aggregate performance is low, based on the sectoral shift theory. Our hypotheses and empirical results show that the interactive effect of firm-level and aggregate-level shocks are larger than the sum of the individual effects.
Download or read book Real Business Cycles written by John Ralph Presley and published by . This book was released on 1993 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Sectoral Shocks and Metropolitan Employment Growth written by and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The Federal Reserve Bank of Philadelphia presents the full text of the August 2000 working paper entitled "Sectoral Shocks and Metropolitan Employment Growth," written by Gerald Carlino, Robert H. DeFina, and Keith Sill. The text is available in PDF format. This paper examines the relative importance of national disturbances versus local industry shocks for employment fluctuations using monthly data on five metropolitan statistical areas. The authors find that the importance of national shocks for employment fluctuations increases as the level of spatial aggregation increases.
Download or read book Technology Shocks and Aggregate Fluctuations written by Mr.Pau Rabanal and published by International Monetary Fund. This book was released on 2004-12-01 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.
Download or read book Local Market Interactions and Aggregate Fluctuations written by Randal John Verbrugge and published by . This book was released on 1995 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Transmission of Domestic and External Shocks through Input Output Network Evidence from Korean Industries written by Dongyeol Lee and published by International Monetary Fund. This book was released on 2019-05-24 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the last two decades, manufacturing industries in Korea have become more concentrated, and interconnectedness across industries and to foreign countries has risen via vertical relationships and trade linkages. This paper investigates the transmission of economic shocks in such a highly concentrated and interconnected structure, focusing on the role of vertical and trade linkages and using the industry-level international input-output data. The results suggest that, first, the role of vertical and trade linkages in propagating growth shocks from both domestic sources and external sources is important. Second, the growth impact of a few key sources of economic shocks is relatively large. These findings highlight that economic shocks in a few key industries and/or major trading partners that are transmitted through vertical and trade linkages can lead to large swings in the overall economy. This paper contributes to the understanding of the potential interactions between the industrial structure and economic growth and stability.
Download or read book Aggregate Versus Industry specific Sources of Economic Growth and Business Cycle Fluctuations written by Paavo Peisa and published by . This book was released on 1989 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
